Prospect evaluation, resource

assessment and risking

Prospect evaluation

Knut Henrik Jakobsson

Norwegian Petroleum Directorate

Inger Fjærtoft

Purposes of prospect evaluation

by the government

• Basis for recommendation for which blocks

should be awarded and proposals for work

commitment for licenses

• Basis for evaluation of applications for

licenses or bidding rounds

• A state participation can be decided on basis

of the evaluation carried out by the

government in addition to the

applicants/bidders

4600

4400

4500

45004700

4500

4600

4700

440045004600

4500

0 1

Km

0,5

The Norwegian licensing round

Announcement Application Award

Negotiation

AnnouncementNomination

NPD performs own evaluations

of announced areas. This forms

an important basis for the

evaluation of applications.

Volumetric calculation

What is the recoverable hydrocarbon quantities of this accumulation ?

The Volumetric Function

Rvol x N/G x por x Shc x F.v.factor x Rec.f.

HCPV (hydrocarbon porevolume)

In-place resources

(HCPV at surface conditions)

Recoverable resources

HCPV

(hydrocarbon pore volume)

Rockvol x Net/Gross x porosity x Saturationhc

trap

definition

reservoir

parameters

The rock volume

Interpretation and mapping• Seismic interpretation

• Digitizing, map construction

• Depth conversion

Geometric descriptionl Vertical closure

l Spillpoint relations

l Trap fill

l Uncertainties in interpretation, mapping and depth

conversion

The trap

The volume between the top surface and the HC-contact

minus

the volume between the bottom surface and the HC-contact

ROCK VOLUME OF THE TRAP =

spillpoint

top surface

bottom surface

vertical

closure

HC-contact

The maps

Top surface

Bottom surface4600

4400

4500

45004700

4500

4600

4700

440045004600

4500

0 1

Km

0,5

A bottom surface map is not required, when:

- the reservoir thickness > vertical closure

- the reservoir thickness is constant

Gross rock volume,

some North Sea fields

0

2000

4000

6000

8000

10000

12000

14000

Troll Frigg Heimdal E. Frigg

A.

53000G

ross

ro

ck v

olu

me,

mill

m3

HCPV

(hydrocarbon pore volume)

Rockvol x Net/Gross x porosity x Saturationhc

trap

definition

reservoir

parameters

Reservoir description

GR SonicSimplified litostratigraphy

Reservoir parametres

• Reservoir thickness (constant or variable)

• Net/gross ratio (average)

• porosity (average; > cut-off value)

• HC-saturation (average)

Gross thickness

• Should be taken care of in the mapping

procedure...

Gross thickness

top surface

bottom surface

Net pay

a

b

c

de

f

g

h

NET PAY =

The total thickness of

all reservoir units (a-h)

with

porosity > threshold value

and

permeability > threshold value

Porosity

• Calculated from electric

well logs

• Core measurements

Average porosity larger

than cut-off value

Poroperm plot

Measured porosities

and permeabilities

are plotted in a XY-

diagram...

...in order to

establish the cut-off

value of efficient

porosity 0 %

5 %

10 %

15 %

20 %

25 %

30 %

0,1 1,0 10,0 100,0 1000,0

porosity

permeability (md)

HC-saturation

• Hydrocarbon saturation (SHC) is estimated

from log analysis

• Only zones with efficient porosity are

included

Hydrocarbon saturation is the

pore volume fraction which

contains hydrocarbons

SHC = 1 - Swater

Spread in input data

min. expected max.

rock volume x x x

net/gross ratio x x x

porosity x x x

hydrocarbon saturation x x x

= Hydrocarbon pore volume (HCPV)

In-place resources

• When we move hydrocarbons (HCPV) from the reservoir to the

surface, physical conditions as pressure and temperature are

changed...

– the oil volume is shrinking, and

– the gas volume is expanding

Reservoir conditions (pR, TR)

Surface conditions (p0, T0)

Oil to the surface...

Surface

conditions

Reservoir

conditions

P (reservoir)

T (reservoir)

V (reservoir)OIL

OIL

ass. GAS

P (surface)

T (surface)

V (surface)

In-place resources

• “GOIP” - Gas Originally in-place

• “STOOIP” - Stock tank Oil originally in-place

In-place resources =

HCPV x Formation volume factor

Recoverable resources

• between 50 and 80 % for gas

• between 25 and 70 % for oil

Recoverable resources =

In-place resources x recovery factor

Depending on drive mechanisms and

production strategy, the recovery factor in

general varies:

Recovery factors for some

Norwegian oil fields

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

76 80 82 85 91 94

StatfjordGullfaksOseberg

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

73 76 80 82 85 91 94

EkofiskEldfiskValhall

Middle Jurassic sandstones Cretaceous chalk

(carbonates)

Recoverable and in-place

resources

0

200

400

600

800

1000

1200

mill Sm 3 o.e.

resources remaining in res.

recoverable resources

HCPV - prognosis vs result

• There is clearly a tendency to overestimate HCPV

• The same conclusion can be made for BRV, HCCOL, and reservoir thickness

• The wider result distribution as compared to prognosis distribution indicates that industry estimates a too narrow range of most likely outcomes

106 108 109

30

107

Prognosis

Result

25

20

15

10

5

0

No. of P

rospects

Resu

lts (S

m3)

106 107 108 109

Prognosis (Sm3)

106

107

108

109

HCPV

Conclusions,

- volume assessments• As explorers, we find less than we predict.

• Explorationists put too narrow ranges on possible

outcomes for field sizes and volumetric parameters.

• The above statements are generally valid for any

play and trap type, phase, pre-drill probability of

discovery and distance to nearest well, however

there is a tendency to do better in regions of longer

exploration history.

• Bulk Rock Volume (and behind that hydrocarbon

column) is clearly the parameter explaining most of

the differences between pre- and post-drill

hydrocarbon pore volume.

Recommendations,

- volume assessments

• We need to improve our volume and parameter

estimations!

• Expand ranges of possible outcomes for the volumetric

parameters. Our prediction capabilities are poor.

– Uncertainties related to seismic interpretation, depth

conversion, and petrophysical parameter prediction are

larger than what is generally perceived

• Spend the time evaluating a prospect according to the

importance of the parameters.

– Bulk Rock Volume should get the highest attention

Risking resources

- geological risk

analysis

Petrad course: Policy and management of petroleum sector development,

Stavanger

September 2006

Inger Fjærtoft

Norwegian Petroleum Directorate

Risk analysis

What is the chance of finding the

minimum amount of recoverable

hydrocarbons as estimated in the

prospect assessment ?

Some Definitions

“There is a RISK that I

am going to fall off this

cliff and I am

UNCERTAIN how far it

is to the bottom!”

Risk - Probability

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.1

probability

risk

Probability = 1 - Risk

Success rate

Success rate =no. of hits

no. of trials = 8/14 = 0.57

Probability categories

Stochastic probabilities- measured values

- success rates, etc

Objective probabilities- logical arguments,

- analogue events, etc

Subjective probabilities- beliefs,

- “guts feeling”, etc

The independent risk factors- NPD’s risk factors

Probability of discovery:

P = P1 x P2 x P3 x P4

...where:

P1 - probability of efficient reservoir

P2 - probability of efficient trap

P3 - probability of efficient source &

migration

P4 - probability of efficient retention after

accumulation

Probability of discovery

The estimated prospect probability is

not the probability of making a

discovery, but:

The probability of finding at least the

minimum quantity of hydrocarbons we

estimated in the resource assessment.

burial

time

P1:

deposition

of reservoir

P2:

trap

formation

P3:

generation,

migration and

accumulation

of hydrocarbons P4:

retention of

hydrocarbons

after accumulation

Reconstruction of the

hydrocarbon accumulation process

Sum up - Main

principlesIndependent risk factors for:

The probability of finding at least the

minimum quantity of hydrocarbons we

estimated in the resource assessment.

Probability of discovery

– High risk prospects

are risked too low

– Low risk prospects are

risked too high

0 %

20 %

40 %

60 %

80 %

100 %

(0-19%) (20-39%) (40-59%) (60-79%) (80-99%)

FUNNSANNSYNLIGHET

FU

NN

FR

EK

VE

NS

SUCCESS RATE

PROBABILITY OF DISCOVERY

OPTIMISTIC

PESSIMISTIC

Prospect prognosis and drilling results:Analysis of discoveries from 1990-2002

In place (Mill. b o.e.)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Total Oil Gas

Prognosis prior to drilling Status 2002

50%

35% 85%

50%